Consultation on zero hours contracts

Following an informal information gathering exercise last year, the government recently announced a consultation to look at whether employers are abusing zero hours contracts.

The consultation will focus on the use of exclusivity clauses (when the primary employer bans the individual from working for another employer even though they have no work for them); and the lack of transparency about the terms and conditions under which the employer has hired the individual.

To address exclusivity clauses, the government is seeking views on a number of options, including:

Banning their use in contracts that offer no guarantee of work

Issuing guidance on the fair use of exclusivity clauses

Encouraging the production of an employer-led code of practice on the fair use of exclusivity clauses, with an additional option to seek government sponsorship of the code

Relying on common law to challenge exclusivity clauses.

To improve the issue of transparency in zero hours contracts, the government is seeking views on:

Improving the content and accessibility of information, advice and guidance

Encouraging a broader, employer-led code of practice which covers the fair use of zero hours contracts generally

Considering whether and how government could produce model clauses for zero hours contracts.

After considering the replies, the Government will publish a formal response to the issues identified, including information on what further action it intends to take.

Under zero hours contracts (which are not legally defined), employees agree to be available as and when needed but are not guaranteed paid work. They can be sent home without warning and often get no holiday or sick pay. No one is entirely sure how many people are on zero hours contracts, but it could be anything from 250,000 (Office for National Statistics) to one million (Chartered Institute of Personnel and Development).

Emma Game from Thompsons Solicitors said: “Any guidance on zero hours contracts and the avoidance of abuse from unscrupulous employers is a welcome proposal. This does not, however, detract from our concerns about these types of contracts where the balance of power ultimately favours the employer.”